The Hindu : National : "India's GDP can double in seven years"

Online edition of India's National Newspaper
Sunday, May 07, 2006

National

National

"India's GDP can double in seven years"

Ashok Dasgupta

ADB for greater role for private sector

Haruhiko Kuroda — Photo: PTI

HYDERABAD: President of the Asian Development Bank Haruhiko Kuroda said on Saturday that India was "on the verge of accelerating the growth" and might even double its gross domestic product in just seven years if a 10 per cent growth rate was maintained.

At a press conference on the conclusion of the 39th annual meeting of the ADB here, Mr. Kuroda said: "I am very hopeful that India can reach the developed economy status at some stage as the country's economy is accelerating, leading to reduction of poverty."

The economy, he said, had been growing at 8 per cent for the last three years and further acceleration would be possible only if the reforms process continued and the country's infrastructure improved.

Speaking in favour of greater private sector participation in infrastructure development, Mr. Kuroda said it was necessary to ensure that the benefits of prosperity and progress percolated down to the poor.

Anti-corruption plan

The ADB, he said, was formulating an action plan to prevent corruption and enhance its effectiveness in the Asia-Pacific region. "We are working closely with the other multilateral development banks to develop a common framework on anti-corruption," he said.

Pledging the ADB's commitment to scale up lending in the coming years with particular focus on infrastructure, transport and energy sectors, Mr. Kuroda said the medium-term strategy would lay stress on improving governance and preventing corruption in the region.

Mr. Kuroda, however, virtually rejected Union Finance Minister P. Chidambaram's demand to cut its lending rates to pre-2000 levels as the ADB's interest rates on its loans were already "extremely low."

"We lend at about Libor+10, which is extremely low when explained in the long-term nature of these loans," the ADB chief said. He said that owing to the strong financial conditions of the Bank it had reduced charges on loans by lowering the cost of funds in many other ways.

On Mr. Chidambaram's other suggestion to shift focus to facilitate private investment in the region, Mr. Kuroda said the ADB's yet-to-be-unveiled medium-term strategy would show the private sector had a key role to play in poverty eradication and development in developing countries.

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